Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has one million shares outstanding and earnings of $6 million before recording the new issue. What is the amount of dilution in earnings per share? Hint: flotation costs reduce earnings.

a) $1.38

b) $1.77

c) $2.79

d) No dilution occurs since new money is received by Maxwell